Oakmont's management company, Senior Management Services of Treemont Inc., is in the process of settling its Chapter 11 bankruptcy case filed in early January. A hearing this week will determine the control and transfer of assets.

A Texas Department of Aging and Disability Services regional surveyor visited Oakmont after the bankruptcy suit was filed, Watson said, and determined that the facility had adequate supplies and was properly taking care of residents.

Chapter 11 bankruptcy allows the company to reorganize rather than liquidate its assets, said Kristi Williams, a legal assistant with Gardere, the Dallas-based law firm representing the management company.

Senior Management Services of Treemont Inc. filed for bankruptcy along with its 24 health-care facilities that include the Katy location and Oakmont Nursing & Rehabilitation of Humble, Williams said.

"They weren't able to pay the employees and some of their bills, and they had been in that cycle for a while," Williams said. "They are trying to pay their creditors and employees and (Chapter 11 bankruptcy) is the most typical way."

A recent auction helped liquidate assets at some of the properties that haven't been profitable, Williams said, which will allow the company to pay its creditors and keep the businesses operating.

Williams said she doesn't know if there will be a change in the ownership of the Oakmont location in Katy.

However, she said more than half of the 24 health-care facilities will continue to operate while only some will close down.

"For health-care facilities, the patients are the No. 1 priority," she said.

It is possible for companies to emerge from Chapter 11 bankruptcy and prosper, Williams said, citing JCPenney and Delta Air Lines as examples of large businesses that have become stronger after reorganization.